Research

UK councils invest £9bn of pension funds in fracking companies – new research

180829 Ros Wills

Cuadrilla’s shale gas site at Preston New Road near Blackpool where fracking is expected this month. Photo: Ros Wills, 29 August 2018

Data released today suggests that UK councils have invested more than £9 billion from staff pension funds in fracking companies, despite opposition to the process.

The news comes as the first high volume hydraulic fracture in the UK since 2011 could be days away.

Many councils have opposed the concept of fracking and there are planning policies against the process in Scotland, Wales and Northern Ireland. The most recent public opinion survey puts support for fracking on 18% and opposition at 32%.

Despite this, council funds remain invested in the industry overseas, according to the data published by 350.org, Platform and Friends of the Earth.

According to the data, the largest single pension fund investment in fracking companies is estimated at almost £1bn by Greater Manchester. This is nearly double the amount in the next highest, West Yorkshire, at just over £0.5bn.

Councils with the highest percentage of their pension funds invested in fracking are: Dumfries and Galloway, Greater Manchester and the London Borough of Merton, each with 6-7%.

In Lancashire – the site of the UK’s first ever horizontal shale gas well – the pension fund has invested £187m, or 2.6%, in companies that rely on fracking. In 2015, the county council refused Cuadrilla’s plans to frack at two sites in Lancashire and the authority opposed the schemes at two public inquiries.

In Scotland, where there is a moratorium on fracking, the data says councils collectively invested a total of £927m of pension fund money in 12 companies that frack.

Glasgow City Council has the largest investment in Scotland at £388m, through management of the Strathclyde Pension Fund, the country’s largest council pension fund.

Scottish investment in fracking appears to be increasing. Scottish council have £35m more invested in companies that frack than a similar study found a year ago.

Paul Wheelhouse

Paul Wheelhouse, the Scottish Energy Minister, announcing a moratorium on fracking, 3 October 2017

 

Last year, more than 60,000 people opposed fracking in a Scottish government consultation. The SNP administration announced it would not support planning applications for fracking and is currently carrying out an strategic assessment of the policy.

Despite this, Scotland’s councils are profiting from a practice that is not permitted in Scotland, the groups argue.

The investment data was compiled from Freedom of Information responses. Platform asked every council that manages a UK local authority pension fund for a full list of investments for the year 2016-2017. It analysed the data to calculate the amount invested in the industry based on 24 companies identified to be participating in fracking. These ranged from multinational companies, such as Shell, BP and ConocoPhillips, to IGas, the smaller stock market-listed operator with shale gas interests in the UK.

A report, Divest Fracking, which accompanies the data said the expansion of gas extraction is threatening to undermine efforts set out in the Paris Agreement to limit the global temperature increase to 1.5C.

It said analysis by Oil Change International had shown that reserves in currently operating oil and gas fields alone would resulting in warming beyond 1.5C

“This means that fossil gas must be phased out, not increased.”

The report added:

“Getting UK councils to divest from all fossil fuels represents a powerful way to do [this]”

Research by GoFossilFree.org shows that commitments to divest fully from fossil fuels have been made by seven councils in Derby, Hastings, Monmouthshire, Oxford, Reading Southwark and Waltham Forest.

Another 10 councils have made partial commitments to divest: Brighton, Bristol, Cambridge, Hackney, Haringey, Kirklees, Lewes, Norwich, Sheffield and Stroud.

pnr 180828 Ros Wills2

Outside Cuadrilla’s shale gas site at Preston New Road in Lancashire. Photo: Ros Wills, 28 August 2018

Reaction – Lancashire

Matthew Brown, Leader of Preston Council

“It’s disappointing to see local authority pension funds being invested in the fracking industry. Fracking destroys local landscapes, threatens communities and fuels climate change across the globe. Council pension funds should be going to support clean fossil free energy which will secure a good return for members and help tackle climate change.”

Claire Stephenson, Frack Free Lancashire

“It’s incredibly short-sighted and worrying that Lancashire County Council has such a vested interest in a dirty fossil fuel industry like fracking.

“Climate change is an urgent issue and is happening right now across the globe. Our politicians have an ethical and moral responsibility to divest from climate-damaging fossil fuels and show climate leadership by supporting clean, renewable energy.

“This shocking revelation of where our councillors have their pensions invested is unsupportable and we urgently call for change and divestment.”

Reaction – England

Deirdre Duff, divestment campaigner, Friends of the Earth

“UK councils should know better than to invest in fracking companies. These companies are inflicting their fracking operations on communities around the world, and this can have significant impacts. Many UK councils have rightly opposed fracking in their own area – however it is shocking that they still support the global fracking industry. We should remember too that the climate change caused by fracking will affect us all, no matter where the fracking is conducted.”

Sakina Sheikh, divestment campaigner, Platform

“The devastating fires and record temperatures this summer have brought the impacts of climate change home. Neither local communities nor our climate can afford for the fracking industry to win. Our councils are providing everyday support to the frackers, it’s time to stop. It’s time to divest from fossil fuels.”

Reaction – Scotland

Mary Church, Friends of the Earth Scotland’s head of campaigning

“Opening up new frontiers of fossil fuels like fracked gas whether here or in the US is completely irresponsible in the context of the global climate crisis. The Scottish Government and Parliament oppose fracking because of the serious risks it poses to our environment and health. If fracking is too dirty and dangerous for us here in Scotland we shouldn’t be trying to profit from it taking place in other countries either.

“The pressure will be on SNP, Labour, Lib Dem and Green Councillors on Pension Committees whose parties oppose fracking in Scotland to put in place an investment approach that supports a healthy future for us all, instead of making a quick buck from dirty industries like fracking.”

Stephen Smellie, UNISON Scotland deputy convenor and Strathclyde Pension Fund member

“Using pension funds to invest in fracking is wrong on environmental and safety grounds. Fossil fuels in general and fracking particularly are risky investments given doubts about the financial viability of fracking and the need to reduce the reliance on fossil fuels. There are other better ways to invest our pension funds and Councils should be living up to their climate change obligations, investing in clean energy solutions, not more fossil fuels.”

  • A global day of action, Rise for Climate, is planned for Saturday (8 September 2018) to promote 100% renewable energy.

70 replies »

    • Pull these investments out now- stop! Investors put your money in renewables, transparency urgently required- name and shame the bodies responsible for advising and misleading shareholders investing in this corruption!
      Shame on all profiteers of environmental destruction.

    • Liz Douglas
      Fear nor re DOD. This site is not an activist Site per se although some may hold that opinion.

      Nor do I see Ruth or Paul visiting terrorist hot spots.

      It is also funded by both pro and anti frackers.

      • Easy to say when you’re not on the PREVENT list having GPS tracking devices fitted to your car and having court evidence deliberately withheld by the police. You live in a dream world in which climate change is fixable by increasing hydracarbon extraction. Stick your head further back in the sand [edited by moderator]

        • Doctor Dave
          I disagree with you there, climate change cannot be fixed by increasing Hydrocarbon extraction and use.
          Why do you think it can?

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